Small Firms Association calls for Minister Burke to reject proposed increase in National Minimum Wage in Budget 2027

Share this:

Copied

The Small Firms Association (SFA), Ireland's leading voice for the small business community, has called on the Government to reject the proposed increase in the National Minimum Wage in the forthcoming budget to help small businesses cope with rising labour-related costs. Today, the SFA published its Pre-Budget Submission which outlines the critical need to halt further wage hikes proposed by the Low Pay Commission to ensure the survival of viable enterprises.

The submission highlights that the National Minimum Wage has seen a steady and significant upward trajectory, moving from €9.15 in 2016 to €14.15 in 2026. While the National Minimum Wage increased by 54.6% in the same period, the Consumer Price Index (CPI) increased by roughly 25% cumulatively from 2016 to 2026.

Furthermore, the SFA has renewed its call for the Government to introduce a temporary PRSI rebate in the forthcoming budget to alleviate the employment costs. The urgency of this request is supported by the recent findings of the SFA's 2026 Small Business Survey, conducted in partnership with Amárach. The survey revealed that 80% of businesses cited rising business costs as a general challenge. Furthermore, a staggering 51% of respondents now name rising costs as the number one threat, and 40% listed labour costs as an operating challenge.

Additionally, the SFA is calling for the proposed PRSI increases planned for October 2026 and 2027 (of 0.3%) to be postponed until inflation has returned to normal levels.

Some of the other measures recommended by the SFA in its Pre-Budget Submission 2027 include the following:

• The introduction of a temporary, targeted PRSI rebate based on the number of lower-earning workers on a company's payroll, operated through Revenue's PAYE Modernization (PMod) system.
• Increase the Small Benefit Exemption to €2,000 per annum and remove the limit on the number of benefits provided annually.
• A reduction in Capital Gains Tax (CGT) from 33% to 20%.
• Simplify the claiming procedure for R&D Tax Credits and reduce the documentation required for small firms.
• Simplify corporate tax returns for small businesses to reduce cost of administration.
• Reduce Stamp Duty on the acquisition of commercial trading property from 7.5% to 4%.
• Align the Enhanced Reporting Requirements (ERR) with existing payroll reporting cycles, shifting from real-time tracking to monthly reporting cycles to drastically curb administrative compliance costs.
• Reconsider the calculation of BIK tax on provision of electric motor vehicles, due to phased rules over next 2 years giving rise to increased BIK cost.
• Reduce policy-related fixed costs on electricity bills through direct exchequer subvention.
• Unlock the surplus in the National Training Fund (NTF) to boost management capabilities through programmes like MentorsWork. The SFA is also calling for the government to invest €50m from the NTF surplus over the next 3 years in Skillnet business networks as well as increased investment into AI upskilling.

Commenting on the pre-budget submission and the Low Pay Commission's proposed minimum wage hikes, SFA Director David Broderick said:

“The SFA welcomed the recent publication of the report from the Cost of Business Advisory Forum. The report sets out a broad range of recommendations, supported by us, designed to reduce costs. Small business owners are frustrated that any increase to the National Minimum Wage will undo a year’s worth of work by the forum of which the SFA was a central player.

"This Budget must not include another increase in the National Minimum Wage. The Minister must reject the proposed increase by the Low Pay Commission to allow small businesses to better cope with ongoing increases in labour-related costs in recent years. Ireland's small firms represent the beating heart of local communities, accounting for over 98% of all enterprises. However, according to recent research and external events, the sector is trapped in a 'perfect storm' of spiralling costs and compounding regulatory burdens that actively threaten business viability.”

The Government recently published the report from Cost of Business Advisory Forum, of which the SFA was an active member. The report contained 63 recommendations designed to tackle rising costs being placed on small businesses. However, the rumoured rise in the National Minimum Wage will offset many of the recommendations’ benefits according to SFA Director David Broderick.

ENDS

Notes to Editor:

• Please see the full ‘Small Firms Association Pre-Budget Submission 2027’ here.
• The Small Firms Association proudly represents a diverse membership of businesses employing up to 50 employees: homegrown and spanning every sector of the economy with members found in every town and every city in Ireland.
• SFA Director David Broderick is available for interviews. For more information and to arrange more interviews, please contact SFA Public Affairs Lead, Jonathan McDade at jonathan.mcdade@sfa.ie or 087 625 3551.